Let me take a shot at this and I'm sure someone will fix what I screw up...
Rollover nights are tallied at the end of the calendar year. After you renew your existing Elite level OR if you achieve a higher Elite level (ie. Silver to Gold), the excess nights will rollover to the following year. Their value can be two fold. First, they will count as lifetime nights which will help you attain Lifetime Elite status quicker. Secondly, if your travel is significantly less than the previous year, these rollover nights can help you maintain your existing level. For example:
2012 You totaled 65 nights between stays and bonus nights. You qualify for Gold after 50 nights. The excess nights, 15, will roll over to 2013.
2013 You start with the 15 nights and only stay 35 nights for the year. Those 15 nights will be added to your 35 and be seen by Marriott as 50, thereby maintaining your Gold status for 2014.
One other thing, rollover nights only roll once.
Also, don't forget that rollover nights only apply if you maintain your current level.
If you are Gold and only manage to achieve Silver status for the coming year, you will not get any rollover nights. For example, say you were gold and only earned 45 nights this year (5 short of the level needed to stay Gold). The 35 nights above the Silver threshold will not become rollover nights. Something to consider. Of course if you are now a Silver and stay 45 nights, then those extra 35 nights would rollover, but at painedplatinum noted, rollover nights expire after a year (you can't roll them over again).
Rollover nights are great for travelers who might have large changes in their patterns of hotel stay from one year to the next. You'll get a boost toward reaching the next level (as long as you don't drop from your current level)